Bancassurance history

The first countries to venture into the field were Spain and France. In the early 70s, ACM (Assurances du Crédit Mutuel) Vie et IARD (life and general insurance) were officially authorized to start operations, a watershed event in the history of insurance. It was their idea to bypass the middleman for loan protection insurance and to insure their own banking customers themselves. They thus became the precursors of what – 15 years later – would become “bancassurance”. For their part, the Spanish began their adventure in the early 1980s, when the BANCO DE BILBAO Group acquired a majority stake in EUROSEGUROS SA (originally LA VASCA ASEGURADORA SA, incorporated in 1968). However, their control was initially only financial, since Spanish law prohibited banks from selling life insurance. This legal barrier was removed in 1991. Today, the top five Spanish bancassurance companies control one third of the market (Vida Caixa, BBVA, SHC Seguros, Aseval, Mapfre Vida) However, from a purely historical point of view, the real pioneers were the British with the creation of Barclays Life in September 1965. This subsidiary was not a great success in the UK, and nor, for that matter, was the concept of bancassurance. On the other hand, the bancassurance concept attracted more than one bank on the continent and the big players very quickly began to set up subsidiaries or joint ventures, thereby introducing the model into their respective countries:
France: in 1971, Crédit Lyonnais acquired the Médicale de France Group and in 1993 signed an agreement giving the Union des Assurances Fédérales Group exclusive rights to sell life insurance through the Crédit Lyonnais network;
Spain: in 1981, the Banco de Bilbao Group acquired a majority interest in EUROSEGUROS SA, an Insurance and Reinsurance company;

Belgium: in 1989, AG – Belgium’s leading insurance company – and Générale de Banque, created Alpha Life. One year later, the big Dutch insurance company AMEV N.V., and VSB, a Dutch bank, went into business together. In the same year, they were joined in the first cross-border merger by AG Group, thereby creating the Fortis Group.
In Europe, Germany and Italy took much longer to get involved, as did Asia, where bancassurance only really began to attract existing Korean banks after government authorization in 2003. In 2004, Fortis signed a contract in Thailand with Muang Thai Group for life and non-life policies, in the process taking a 25% stake in Muang Thai Life Insurance. Fortis, which was seeking to extend the bancassurance model to Asia, already had partnerships in Malaysia and China. On markets where bancassurance is sufficiently developed, like France or Belgium, companies are now moving into a new phase of development:
Countries where bancassurance is only just beginning to emerge: Fortis is a good example, as is Cardif, which is now present in 28 countries (including 6 in Asia);
Consortiums of big companies such as Crédit Agricole and Crédit Lyonnais in France, which makes the new bancassurance operator a front-ranking player, with premium income in excess of €13 billion (special 2004 Argus de l’Assurance ranking, source Predica).
These examples can only become more common with time as companies build on other operators’ experience to introduce the concept of bancassurance into their own countries. However, exporting the bancassurance concept is no easy matter. Setting up in places where markets are already fairly mature and highly competitive calls for significant competitive advantage. Apart from this difficulty, potential exporters will need to be highly adaptable to adjust to local regulatory conditions and consumer habits. Not forgetting, of course, that all the bancassurance tools, e.g. its management systems, will need to be adjusted in line with local realities: IT harmonization can be complex when the newcomer is a company at the cutting edge of Customer Relation Management (CRM) while the local partner is only in possession of the most basic data (surname, first name, date of birth). “The system for selling insurance products in Korea, for example, produces very high wastage levels compared to European countries”, explains Denis Wallerich, Head of Marketing and Development in the World Savings Department at BNP Paribas Assurance. Knowledge of local conditions is essential when starting operations in a foreign country.